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Defining the risk function’s sphere of control

December 03, 2019

In brief

A relentless pace of complex, interconnected change

How can risk leaders face their leading threats?

Going digital to manage digital threats

One concern for risk leaders involves new technologies.

  • The risk from disruptive new technology is a rising concern for function leaders.
  • New tech can drive efficiency and growth but can bring unforeseen consequences.
  • Take artificial intelligence. Only 11 percent of risk leaders feel fully capable of assessing the risks that may come with AI.

Getting a boost from smart technology

Users of smart technology such as machine learning (ML) report better risk readiness.

  • Among ML users, 73 percent are satisfied with two-year progress vs. 45 percent of non-users.
  • Despite benefits, risk functions’ use of the most sophisticated technologies is limited. Only 10 percent are, for example, applying ML to datasets.

Tapping added value from data

Financial firms see potential value in new data sources.

  • For example, within two years 57 percent of respondents plan to use marketing data to help manage risk, but only 39 percent do so now.
  • But 39 percent of respondents are not confident they can gain insights from new data sources at the pace needed to respond to new threats.

Collaborating for better risk readiness

Collaboration can mean better risk mitigation—and added value.

  • Respondents report better coordination with finance. But only 22 percent say risk and finance equally contribute to corporate strategy and enterprise risk management steering.
  • Is the function valued? Just 55 percent think other organizations recognize the important role risk plays.

For risk leaders, what’s next?

About the Authors

Steve Culp

Senior Managing Director – Strategy & Consulting


ALIETTE LELEUX

Managing Director – Strategy & Consulting, Client Lead


CHRIS JOHNSTON

Managing Director – Strategy & Consulting


FABRIZIO SARROCCO

Managing Director – Strategy & Consulting


Explore the findings within each industry

Banking Global Risk Management Study

Do banking risk teams need a fresh approach to manage the threats unleashed by emerging tech, open banking and relentless competition? Read more.

Capital Markets Global Risk Management Study

See how new tech, LIBOR retirement and regulatory pressure have transformed dormant risks into real threats for capital markets risk leaders.

Insurance Global Risk Management Study

Learn how insurance companies are braced for unknown consequences of new tech, aggressive competition and changing client expectations.

Get the essentials

The Big Read

20 minute read

Full Financial Services Report

We surveyed 683 financial services risk executives to discover their top concerns impacting the business and to explore how they can respond by defining their function’s sphere of control.

Short on time?

Slideshare

10 minute read

What top-line risk trends did our Global Risk Management Study identify? See our presentation for highlights.

Related capabilities

Digital risk & compliance

 Helping CFOs, CROs and COOs navigate “the New” to drive enterprise value.

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